Economic Outlook: An uneven recovery

The global recovery is still fragile and uneven. The advanced economies are entering a self-sustaining recovery, but for the commodity-producing countries the situation has changed for the worse. In the Nordics especially Sweden is doing well.

Economic activity in the advanced economies is picking up gradually, but at the same time most Emerging Markets are recovering at a slower pace than expected at the beginning of the year. In a new economic forecast Nordea expects a 3.1 per cent increase in world economic GDP in 2015 and a 3.5 per cent increase next year.

The present decline in world trade poses a big challenge to the small open Nordic economies. However, due to strong domestic demand the Swedish economy has shifted into a higher gear.

- The Nordics follow different growth patterns, but overall we expect the Nordic region to grow by 2.0 per cent in 2015, accelerating to 2.2 per cent in 2016. Especially the Swedish economy ispulling inthe right direction, says Helge J. Pedersen, Nordea’s Group Chief Economist.

In Sweden the refugee crisis provides fiscal stimulus through increased government spending. Exports have started to pick up as an effect of Euro-area growth, and Swedish GDP growth is expected to accelerate to around 3.5 per cent in 2015 and 2016.

Norway is hit hard by the slowdown in the oil services industry, which is not over yet. Consumer spending growth will help moderate the economic setback. Mainland exports are currently benefiting strongly from the krone’s weakness.

A broadly-based recovery is emerging in Denmark, driven mainly by consumer spending. In 2016, we expect the recovery to gain more momentum as also investment activity will start to pick up.

The Finnish economy is set to expand very slowly, suggesting that the country is in need of reforms. Problems relating to exports, a lack of confidence and a weak growth outlook spell difficulties for domestic demand.